CTS Corporation

Hello, everyone, and welcome to the CTS Q4 2022 earnings call. My name is Bruno, and I will be operating your call today. During the presentation, you can register to ask a question by pressing star one on your telephone keypad. I will now hand over to your host, Mr. Kieran O'Sullivan, President, CEO. Mr. Kieran, please go ahead.

Thanks, Bruno. Good morning and welcome, everyone. to our fourth quarter and full year 2022 earnings call. We delivered solid financial results in the face of economic uncertainties that remain elevated, driven in part by the current geopolitical environment in Europe, demand softness, as well as rising interest rates and inflation. Although supply constraints are easing as we experience shortened lead times, we expect inflation and some supply pressures to remain a challenge especially in the first quarter of 2023. As discussed in October, we were impacted in the fourth quarter by supply issues from a semiconductor supplier for our smart actuator product line. Our focus on profitable growth, diversification to our advanced materials capability, and electrification in mobility markets remain our highest priorities. We are energized and focused on achieving our long-term growth goals and improving our operational performance. For the fourth quarter 2022, sales were 142 million, an increase of 7.4% from the same period last year, including the negative impact of the anticipated short-term semiconductor supply pressures we noted in our last earnings call. Adjusted gross margin was 36.3%, down 38 basis points from the same period last year. Adjusted EBITDA margin was 22.9%, up 200 basis points versus the fourth quarter of 2021. Adjusted diluted earnings per share increased 14% to 56 cents on a year-over-year basis. Operating cash flow was 25.5 million compared to 26 million in the fourth quarter of 2021. New business awards were 71 million. We added four electric vehicle platform wins in the quarter and 10 new customers in non-transportation markets. Turning to full year 2022 results, sales rose 14.4% to 587 million from 513 million in 2021. Adjusted gross margin was 36.5%, up 50 basis points from 2021. Adjusted EBITDA margin, increased 180 basis points to 22.8% from last year. Adjusted diluted earnings per share increased 27% from $1.93 to $2.46. Operating cash flow was $121 million, up $35 million from 2021. New business awards were $523 million, below the elevated levels we achieved in 2021 as transportation customers delayed sourcing awards while they manage critical supply constraints. Going forward, we are reintroducing total book-to-business for transportation only and also introducing book-to-bill ratios for the company to provide more visibility into long and short-term trends. We continue to make progress on our diversification strategy as non-transportation sales increased to approximately 48% of our overall revenue, up from 45% last year.

Ashish will take us through the Safe Harbor Statement. Ashish? I would like to remind our listeners that this conference call contains forward-looking statements. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Additional information regarding these risks and uncertainties is contained in the press release issued today, and more information can be found in the company's SEC filings. To the extent that today's discussion refers to any non-GAAP measures under Regulation G, the required explanations and reconciliations are available in the Investors section of the CTS website. I will now turn the discussion back to our CEO, Kirno Sullivan.